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Amazon abandons plans to take over Dubai’s Souq.com

January 18, 2017 10:58 AM

(Bloomberg)—Amazon.com Inc. and India’s Flipkart Online Services Pvt have walked away from talks to acquire Dubai-based Souq.com, an online retailer and marketplace, after disagreeing over price, according to two people with knowledge of the matter.

The e-commerce business is now seeking other potential investors and is negotiating with mall-operator Majid Al Futtaim, one of the people said, asking not to be identified as the talks aren’t public.

U.S. online retail giant Amazon entered talks with Souq.com last year in a deal that would have been worth about $1 billion, people with knowledge of the matter said in November. The Middle Eastern company’s existing investors include Tiger Global Management and South Africa’s Naspers Ltd. Souq.com, No. 308 in the Internet Retailer 2016 Global 1000, appointed Goldman Sachs Group Inc. to find buyers for a stake last year, according to people familiar with the matter.

Souq.com became the highest valued Internet company in the Middle East after a $275 million founding round in February 2016, according to Standard Chartered Plc, which has invested in Souq. The company sells more than 1.5 million products online to customers in countries including the United Arab Emirates, Egypt and Saudi Arabia.

A spokesman for Majid Al Futtaim declined to comment, while Amazon and Flipkart didn’t immediately return requests for comment. Souq.com wasn’t immediately available to comment. Amazon is No. 1 in the Internet Retailer 2016 Top 500 Guide; Flipkart is No. 76 in the Internet Retailer 2016 Asia 500.

Investments into technology companies from the Middle East is picking up. Emaar Properties PJSC chairman Mohamed Alabbar raised $1 billion from investors including Saudi Arabia’s sovereign wealth fund to create e-commerce firm Noon, which launches later this month. He is also leading a $1 billion technology investment company formed with other regional investors and plans to start a social-media messaging service similar to WhatsApp.

Dubai-based ride-hailing app Careem Networks FZ raised $350 million from investors including Japanese e-commerce giant Rakuten Inc and Saudi Telecom Co. in December, valuing it at about $1 billion.